Beyond Meat stock gains after Citi upgrade

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Shares of Beyond Meat Inc. are up 1.9% in premarket trading Monday after Citi Research analyst Wendy Nicholson upgraded the stock to neutral from sell. “Given COVID-19, it seems as if many foodservice operators have chosen to streamline their menu offerings,” Nicholson wrote. “However, as we move past the worst of the pandemic, we expect more foodservice operators will add plant-based meat offerings to their menus, and we expect Beyond will get a share of that incremental foodservice business over time – both in the U.S. and overseas.” This is particularly true in China, a market that Beyond Meat views as a strong growth opportunity. Beyond Meat shares have lost 10% since the time of Nicholson’s bearish initiation in early July, as the S&P 500 has risen 11% in that time. “While we are less negative today on BYND than we were at the time of our launch of coverage, we are still not ready to recommend the shares with a buy rating,” she wrote, given the stock’s expensive valuation “on just about every metric” and her concerns about profitability, as the company reported lower margins than she expected last quarter.
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